Session Law

Chapter 169
AN ACT RELATIVE TO THE FINANCIAL STABILITY IN THE CITY OF SPRINGFIELD.

Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
as follows:

SECTION 1.
The general court finds that:-

(1) The city of Springfield has a projected structural deficit for fiscal
year
2005.

(2) Without significant changes the city is likely to project a structural
deficit in fiscal year 2006.

(3) As a result of such structural deficits, the city is unable to enact a
balanced budget and is in fiscal crisis.

(4) The fiscal crisis poses an imminent danger to the safety of citizens of
the
city and their property.

(5) Without an approved balanced budget, the city will be unable to collect
property taxes during part or all of fiscal year 2005.

(6) The city may be unable to obtain reasonable access to credit markets.

(7) The city's credit has been downgraded to a sub-investment grade credit
rating.

(8) The city has received fiscal 2004 local aid from the commonwealth in
excess
of $260,000,000, representing over 60 per cent of its operating budget, a
proportion in keeping with that of recent years.

(9) Special acts approved in 1989, 1991 and 1996 have not been successful in
achieving fiscal stability for the city.

(10) In order to assure a comprehensive long-term solution to the city's
financial problems, it is necessary to enact extraordinary remedies, including
a
finance control board and, if necessary, a receiver, with the powers necessary
to
achieve the intent of this act.

(11) The governor has recommended to the general court pursuant to
section 8 of
Article LXXXIX of the Amendments to the Constitution that legislation be
enacted
to resolve the financial emergency in the city and to restore financial
stability
to the city.

The Governor reduced the following section by striking wording and added wording as set forth below: The Governor's veto was overriden by the Legislature.
SECTION 2.
Notwithstanding any general or special law to the
contrary, there is hereby established and set up on the books of the commonwealth the Springfield
Fiscal Recovery Trust Fund, in this act called the fund, the sole purpose of which shall be to provide interest free loans to the city of Springfield. Effective June 30, 2004, the comptroller shall transfer to the fund $52,000,000 from the General Fund to the fund. The fund shall be established as a separate trust fund, subject to
the
control of the secretary for administration and finance, who shall serve as the
trustee and who may approve without further appropriation interest-free loans
from the fund to the city of Springfield. The loan shall be
disbursed to the city from time to time in such amounts and upon terms and
conditions determined by the finance control board and approved by
the secretary for administration and finance. These
terms
and conditions may provide that payment of money on account of tax receivables
be
paid over to the commonwealth to reduce any loan balance. The
city shall repay the loan on a schedule proposed by the finance control board
and approved by the secretary for administration and finance. Any such
repayment schedule proposed by the finance control board and
approved by the secretary for administration and finance shall begin in
fiscal year 2008. The
city shall repay the entire balance
of amounts loaned pursuant to this section no later than June 30, 2012. This
loan shall not be forgiven in whole or in part, and failure
to
repay the full value of loans disbursed from the fund to the city shall
result
in an equally commensurate reduction in local aid payments made by the
commonwealth to the city in fiscal year 2013. The
repayments shall be
deposited in the commonwealth's General Fund. Loan amounts from the fund may
be expended for the 3-year operating expenses of the Springfield finance
control board established in section 4, subject to the approval of the
secretary
for administration and finance. The secretary shall report quarterly to the
house and senate committees on ways and means on expenditures made from the
fund, including the amounts and purposes of expenditures for personnel costs,
contracted personnel costs or consultant fees. Notwithstanding any
general
or special law to the contrary, any indebtedness incurred under this act shall
not be included in determining the statutory limit of indebtedness of the city
under section 10 of chapter 44 of the General Laws, but except as provided in
this act, shall otherwise be subject to the provisions of said
chapter 44. Any
amounts loaned to the city from funds made available in this section shall be
repaid to the commonwealth regardless of any actions taken by any trustees
appointed on behalf of the city pursuant to chapter 9 of Title
11 of the United States Code. The secretary shall report quarterly to the
house
and senate committees on ways and means on the amounts and purposes of
expenditures made from the fund. The fund shall expire on June 30, 2007.

SECTION 3.
Notwithstanding section 2 of chapter 44A of the General
Laws, the
city of Springfield may apply for the designation of revenue anticipation notes
authorized
under section 4 of chapter 44 of the General Laws as qualified debt, and may
be
authorized to issue such notes as qualified debt for so long as the board
established by section 4 continues in existence, or for the period of any
receivership under section 5.

SECTION 4.
(a) There shall be in the city of Springfield
a finance control board,
in this act called the board, which shall consist of 5 members: 3 designees of
the secretary of administration and finance, the mayor of the city of
Springfield, and the president of the city council of the city of Springfield.
The board shall act by a majority vote of all its members. The secretary
for
administration and finance, in this act called the secretary, may fix stipends
to
be paid to members of the board other than the mayor and president of the city
council of Springfield, which stipends shall be paid from directly from the
trust
established in section 2. The board shall initiate and assure the
implementation of appropriate measures to secure the financial stability of the
city, and shall continue in existence until June 30, 2007, and thereafter for
such period as the members may vote to continue its existence, provided however
that the secretary of administration and finance may at any time abolish the
board. The board shall be a state agency for the purpose of chapter 268A of
the
General Laws.

(b) Action by the board under the authority of this act shall in all
respects
constitute action by the city for all purposes under the General Laws and under
any special law.

(c) Until the board ceases to exist, no appropriation, borrowing
authorization,
transfer, including transfer from or replenishment of funds into the
supplemental
reserve fund under section 7 of chapter 656 of the acts of 1989, or other
municipal spending authority shall take effect until approved by the board.
The
board shall approve all appropriations, borrowing authorizations, transfers, or
any other municipal spending authorizations, in whole or part.

(d) In addition to the authority and powers conferred elsewhere in this act,
and
notwithstanding any city charter provision, or local ordinance to the contrary,
the board shall have the following powers:

(1) to amend the annual or supplemental budgets of the city and the school
committee, including the establishment, increase or decrease of any
appropriations and spending authority for all departments, boards, committees,
agencies or other units of the city and the school committee, but,
notwithstanding section 34 of chapter 71 of the General Laws, this paragraph
shall fully apply to the school department and all school spending purposes;

(2) to implement and maintain uniform budget guidelines and procedures for all
departments;

(3) to amend, formulate and execute capital budgets, including to amend any
borrowing authorization, or finance or refinance any debt in accordance with law;

(4) to amortize operational deficits in an amount and for such term as the
secretary approves on an annual basis;

(5) to develop and maintain a uniform system for all financial planning and
operations in all departments, offices, boards, commissions, committees, agencies
or other units of the city's government, including the school department;

(6) to review and approve or disapprove all proposed contracts for goods or
services;

(7) notwithstanding any general or special law to the contrary, to establish,
increase, or decrease any fee, rate, or charge, for any service, license, permit
or other municipal activity, otherwise within the authority of the city;

(8) notwithstanding the charter or any city ordinance to the contrary, to
appoint, remove, supervise and control all city employees and have control over
all personnel matters; the board shall hold all existing powers to hire and fire
and set the terms and conditions of employment held by other employees or
officers of the city, whether or not elected; the board shall have the authority
to exercise all powers otherwise available to a municipality regarding
contractual obligations during a fiscal emergency; and no city employee or
officer shall hire, fire, transfer or alter the compensation or benefits of any
employee except with the written approval of the board. The board may delegate or
otherwise assign these powers with the approval of the secretary;

(9) to alter the compensation of elected officials of the city to reflect
the
fiscal emergency and changes in the responsibilities of the officials as
provided by this act;

(10) to employ, retain, and supervise such managerial, professional and
clerical
staff as are necessary to carry out its responsibilities, with the approval of
the secretary. The board, with the approval of the secretary, shall have
authority to set the compensation, terms, and conditions of employment of its
own
staff. The compensation of personnel hired pursuant to this subsection shall
be
determined and fixed by the board and paid directly from the trust established
in
section 2. Staff hired under this subsection shall be deemed employees of the
commonwealth, except such employees as the board formally designates
independent
contractors, but chapters 31 and 150E
of the General
Laws shall not apply to such employees.

(11) to reorganize, consolidate or abolish departments, commissions,
boards,
offices or functions of the city, in whole or in part, and to establish such
new
departments, commissions, boards, offices or functions as it deems necessary,
and
to transfer the duties, powers, functions and appropriations of 1 department,
commission, board or other unit to another;

(12) to appoint in consultation with the secretary persons to fill
vacancies
on
any board, committee, department, or office acting in an advisory capacity to
the
board;

(13) to sell, lease, or otherwise transfer real property and other assets
of the
city with the approval of the secretary;

(14) to purchase, lease, or otherwise acquire property or other assets on
behalf
of the city with the approval of the secretary;

(15) to promulgate rules and regulations governing the operation and
administration of the city;

(16) to seek voter approval of such general override, debt exclusion or
capital
expenditure exclusion ballot questions as are provided for in section 21C of chapter 59 of the General Laws;

(17) to approve the allocation of the tax levy through the selection of a
residential factor pursuant to section 56 of chapter 40 of the General Laws
but
no choice of a residential factor under said section 56 shall be valid until
it
has been approved by the board;

(18) to alter or rescind any action or decision of any municipal officer,
employee, board or commission within 14 days after receipt of notice of such
action or decision;

(19) to suspend in consultation with the secretary such rules and
regulations of
the city and to promulgate rules and regulations necessary to carry out this
act;
and

(20) to exercise all powers under the General Laws and this or any other
special
act, any charter provision or ordinance that any elected official of the city
may
exercise, acting separately or jointly. With respect to any such exercise of
powers by the board, the elected officials of the city shall not rescind or
take
any action contrary to such action by the board so long as the board continues
to
exist.

SECTION 4A.
Within 30 days after the appointment of the board, but
no
later than September 1, 2004, the board shall make a preliminary report to the
secretary of administration and finance and to the chairpersons of the house
and senate committees on ways and means. The report shall present a
preliminary analysis of the fiscal crisis in Springfield and the board's
preliminary finance and management plans to address the city's operating and
structural deficits. The board shall examine the feasibility and advisability
of
measures to mitigate or relieve the burden of school transportation costs.

SECTION 5.
(a) If the board established by section 4 concludes that
its powers
are insufficient to restore fiscal stability to the city of Springfield, it
shall so notify the secretary for
administration and finance, and shall forward to him a statement of the reasons
why it has been unable to restore fiscal stability to the city. Upon receipt
of
such statement, the secretary for administration and finance may terminate the
existence of the board, notwithstanding section 4, and may appoint a receiver
for
the city for a period as he may determine. The secretary may at any time and
without cause
remove the receiver and appoint a successor, or terminate the receivership.
The secretary
shall determine the salary of the receiver, which salary shall be payable by
the
city.

(b) The receiver shall have the following powers:-

(1) all powers of the finance control board under section 4. Such powers
shall
continue in the receiver and shall remain through the period of any
receivership;

(2) the power to exercise any function or power of any municipal officer or
employee, whether elected or otherwise, specifically including the following
powers relative to building and zoning:

(A) to order the laying out, locating anew or discontinuing of streets and ways
within the city;

(B) to regulate the construction of buildings;

(C) to implement such changes to the city's zoning ordinance as are necessary;
provided, however, that the zoning ordinance continues to promote public safety,
health, and welfare; and provided further, that no zoning change shall affect or
interfere with the integrity of existing residential districts. No such proposed
zoning changes shall apply to structures or uses lawfully existing or lawfully
begun before the effective date of the zoning change;

(i) The procedure for implementing changes in zoning ordinances as provided
in
section 5 of chapter 40A of the General Laws shall not govern such changes in
the
city during the time the receiver is in operation.

(ii) The receiver shall not implement any zoning change until a public
hearing
has been held at which interested persons shall have an opportunity to be
heard.
The public hearing shall be held within 60 days after the date on which the
board
originally proposed the zoning change. Notice of the time and place of the
public
hearing, of the subject matter sufficient for identification, and of the place
where texts and maps thereof may be inspected shall be published in a newspaper
of general circulation in the city once in each of 2 successive weeks; but the
first publication shall be not less than 14 days before the day of the hearing;
and notice shall also be posted in a conspicuous place in city hall for a
period
of not less than 14 days before the day of the hearing.

(iii) Notice of such proposed zoning change shall be sent to any nonresident
property owner who files an annual request for such notice with the city clerk
no
later than January 1 of each year. The receiver shall establish a reasonable
fee
to cover the cost of providing these notices; and

(3) the power to file a petition in the name of the city under Chapter 9 of
Title
11 of the United States Code, and to act on the city's behalf in any such
proceeding.

(c) Upon the appointment of a receiver, the office of mayor shall be
abolished,
and the receiver shall exercise all the powers of the mayor under the General
Laws, special laws, the city charter and ordinances. Other elected officials
of
the city shall continue to be elected in accordance with the city charter, and
shall serve solely in an advisory capacity to the receiver.

SECTION 6.
(a) Notwithstanding chapter 60 of the General Laws, the
board or the
receiver may invoke this section by a written statement filed with the
treasurer and the
city council, which statement shall also be given by publication as defined in
section 1 of said chapter 60 and recorded in the registry of deeds.

(b) If the board or the receiver invokes the provisions of this section, the
rights of redemption from tax title of all parcels of real estate for which the
tax title is held by the city of Springfield shall be foreclosed by operation
of
law without the necessity of sale pursuant to section 79 of chapter 60 of the
General Laws or of filing a petition to foreclose under section 65 of said
chapter 60, at the expiration of 1 year from the effective date of publication
of
the statement required by the first paragraph of this section or 1 year from
the
date of the tax taking, whichever is later; if the city has
given notice by certified or registered mail to any person who has filed a
statement with the city under section 39 of said chapter 60, and to assessed
owners, and has given notice by publication, as defined in section 1 of said
chapter 60, at least 3 months before the expiration of the 1-year redemption
period, which notice shall list each parcel by address and by the name of the
assessed owner at the time of the tax taking or sale, and the assessed owner
for
the most recent annual assessment, if different. This section shall apply to
tax
titles created by instruments recorded before the effective date of this act
and
to those recorded during the existence of the board or receiver. Such
provisions
shall have no effect on any legal proceeding commenced before July 1, 2005 in
the
courts of the commonwealth in which a party has appeared asserting a cause of
action and claiming a right to redeem. This section shall not apply to tax
titles
that are the subject of a payment agreement under an ordinance enacted pursuant
to section 10, but if this section is invoked the city shall record at the
registry of deeds a list of all parcels subject to such agreements. The
finance
control board or the receiver shall have the power to disclaim title to any
property acquired by foreclosure under this section, if it is of the opinion
that
the title so acquired is of doubtful validity.

SECTION 7.
The city of Springfield may, with prior approval of the
board, by
ordinance authorize payment agreements between the treasurer and persons
entitled
to redeem parcels in tax title. Such agreements shall be for a maximum term of
no more than 3 years, or such lesser period as the ordinance may specify, and
may
waive up to 30 per cent of the interest that has accrued on the amount of the
tax
title account, subject to such lower limit as the ordinance may specify. An
ordinance under this section shall provide for such agreements and waivers
uniformly for classes of tax titles defined in the ordinance. Any such
agreement must require a minimum payment at the inception of the agreement of
40
per cent of the amount needed to redeem the parcel. During the term of the
agreement the treasurer may not bring an action to foreclose the tax title
unless
payments are not made in accordance with the schedule set out in the agreement,
or timely payments are not made on other amounts due to the municipality that
constitute a lien on the same parcel.

SECTION 8.
In addition to the supplemental reserve fund under section 7 of chapter 656 of the acts of 1989, there shall be in the city of Springfield a capital reserve fund into which the city shall appropriate in each fiscal year at least 1.5 per cent of the amount of property taxes committed for the preceding fiscal year. The fund may be appropriated only for purposes for which the city
could borrow for 10 years or longer under chapter 44 of the General Laws.

SECTION 9.
(a) The board shall submit reports to the house and senate committees on ways and means not later than October 1, January 1, April 1, and July 1 of each year, which shall provide a detailed accounting of all loan funds expended pursuant to section 2. The accounting shall itemize by recipient the amount of any stipends paid pursuant to section 4.

(b) The board shall submit a report to the house and senate committees on ways and means not later than 5 days before the award of any no-bid contract to any private person or entity. This report shall disclose: (1) the terms of the anticipated contract, including but not limited to all monetary compensation;
(2)
the identity of the contractor and any subcontractor or affiliate of such contractor that would benefit under the contract; (3) a specific finding by the board that not using a competitive bidding process under the circumstances is necessary to ensure the provision of essential services to the city; and (4) a certification by the board that it engaged in arms-length negotiations with the contractor and that the terms of the contract represent the best possible
arrangement for the city under the circumstances.

(c) The finance control board shall submit a report to the house and senate committees on ways and means not later than 5 days before the award of any contract if, at any time within 3 years before the effective date of this act, any member of the finance control board or any employee or officer of the executive office of administration and finance served as an employee, member or
general or limited partner of the contractor, its owners or affiliates. The report shall also disclose whether, at any time within 3 years before the effective date of this act, any member of the finance control board or any employee or officer of the executive office of administration and finance was required to file a statement pursuant to the Securities Exchange Act of 1934 as
beneficial owner of more than 10 per cent of a class of the contractor's equity securities. This report shall disclose the terms of the anticipated contract, including but not limited to all monetary compensation, and the identity of the contractor and any subcontractor or affiliate of such contractor that would benefit under the contract.

SECTION 10.
This act shall be effective notwithstanding any charter provision or ordinance to the contrary.